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THERMAL COAL-Australian coal prices rise after floods disrupt loadings

Published 10/02/2016, 05:17 pm
Updated 10/02/2016, 05:20 pm
THERMAL COAL-Australian coal prices rise after floods disrupt loadings

By Henning Gloystein

SINGAPORE, Feb 10 (Reuters) - Australian physical coal bucked a global trend of falling prices this week as floods following heavy rains disrupted some cargoes being delivered from mines in Queensland province, lifting prices to their highest since October last year.

Coal cargoes for prompt shipment from Australia's Newcastle terminal GCLNWCPFBMc1 last settled at $54.15 a tonne, up over 11 percent from January's low of $48.60 and at levels last seen in early October 2015.

"There have been some problems in loading coal cargoes from Queensland (Australia) following floods and rain in recent days, so that's pushed Newcastle prices up, trending against other coal benchmarks," one coal trader said.

Despite the price jump in Australia, global coal markets remain depressed as a mild winter across the northern hemisphere and a general slowdown in demand continued to pull on prices.

European benchmarks remained the weakest, with cargoes for delivery into Amsterdam, Rotterdam or Antwerp (ARA) last closing at $43.25 a tonne, 20 percent below levels seen during the 2009 financial crisis.

Traders said European prices were being weighed by a mild winter as well as high output from renewables which were sidelining fossil-fuelled power demand.

With brief exceptions, this winter has seen above-usual average temperatures, reducing electricity and heating demand, while available power supplies have been boosted by relatively strong wind power output.

Meteorological data on Thomson Reuters Eikon shows that temperatures as well as wind power output could drop towards the second part of the month, likely boosting coal demand.

"We might see a short-term lift for demand in coal, but we're already approaching the end of winter, and stocks are pretty full, so prices shouldn't jump by much," another coal trader said.

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